The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its forecast for this year’s GDP growth from its previous estimate of 2.11 percent in April to 2.14 percent as stronger economic growth momentum across the globe buoys international trade and the nation’s exports.
Although the pace of GDP growth in the second half is likely to slow from 2.6 percent in the first quarter and 2.43 in the second quarter to 1.84 percent in the third quarter and 1.75 percent in the fourth quarter, the nation would still preserve a 2.14 percent growth rate for this year, the institute said.
That would mark the strongest growth since 2012, but it would still lag behind the global average of about 3 percent, CIER said.
The anticipated growth rate is not stellar, as consumption and investment did not show a significant improvement in the first half, CIER president Wu Chung-shu (吳中書) told a news conference in Taipei.
In particular, imports of capital equipment contracted in May, with the decline last month expanding to 15.1 percent as semiconductor companies slashed their procurement, CIER said.
The pullback by the semiconductor sector could mark a shift in the investment outlook and the timing coincides with the government’s Forward-looking Infrastructure Development Program, Wu said.
The NT$420 billion (US$13.83 billion) program has become one of the most pivotal factors affecting the prospects of the nation’s industries and economic performance, Wu said.
Over four years, the program is expected to boost the nation’s GDP growth by 0.1 percent per year, Wu said.
On reports of supply chain woes that might lead to a delay in the launch of Apple Inc’s next iPhone, Wu said that the impact from the perspective of Taiwanese suppliers would be limited.
What really matters is how consumers receive the new product, he said.
The CIER’s latest forecast was in line with that of other institutions, which generally see GDP growing by more than 2 percent this year.
The Directorate-General of Budget, Accounting and Statistics forecast GDP growth at 2.05 percent, while the Yuanta-Polaris Research Institute (元大寶華綜經院), the Taiwan Research Institute (台灣綜合研究院) and the Taiwan Institute of Economic Research (台灣經濟研究院) have forecast 2.10 percent, 2.01 percent and 2.04 percent growth respectively.
Separately, DBS Bank yesterday kept its GDP growth forecast for this year at 2.5 percent.
GDP growth lost momentum in the second quarter, coinciding with the technology sector’s slow season, but the pace should pick up throughout the second half, the bank said.
The lender said strong demand for the next iPhone would offset concerns about the delayed launch, as well as extend a surge in orders for suppliers in the second half of this year and early next year.
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